So, you are looking to buy your first home. You’ve lived at home with the parents, saved and researched and it’s now time.
But……you might be surprised to find that you can’t borrow as much as you want or need!
And you’re not alone. The Australian Bureau of Statistics reports that in December 2015, the average loan amount for a first home buyer dropped by $6,400.
In a previous blog we explained why working with a mortgage broker is the best way to access as many options as possible when applying for a loan for your first home.
The advantages of working with a Mortgage Broker
Mortgage brokers have access to a wide range of home loan products through a panel of lenders that they are accredited with. Their role is to act as a ‘go-between’ for borrowers and lenders. Your mortgage broker will do all the leg work for you – from liaising with the banks for their best rates and terms to filling in the dreaded paperwork!
Saving for a bigger deposit may also help!
Borrowing money is all about risk for the institution lending you the money. Caution comes from lenders’ primary concern being that the loan can be paid back! Therefore your loan-to-value ratio is part of what determines the size of the risk you may be to the lender. Loan-to-value ratio is the amount of money you are asking for versus the value of the property you are buying.
The size of your deposit is all important. 20% would be a minimum, but 30% even better! This reduces the amount of risk to the borrower.
Your broker can assist with your budget and market forecasts and advice in reality you can afford to commit too in terms of the size of the loan.
Supply as much information as you can!
Mortgage Brokers provide choice – comparing 10 banks and 30 different products! Providing your broker with as much information about your financial situation is vital. Include your living expenses or available savings, salary documentation and any other relevant information you have.
If you are self-employed, it may be more of a challenge to supply consistent income records, but your broker can talk you through the options available to you.
For more information or for a chat about your options call Paul on 03 5320 1555 or email firstname.lastname@example.org